1041-00003 · Solara Digital Infrastructure LP · Transaction Documents/Ancillary Agreements

transition-services-agreement-form.docx DOCUMENT M&A / Corporate

133 / 155 ← → ✕

FORM OF TRANSITION SERVICES AGREEMENT

Exhibit [____] to the Merger Agreement

[This is a form agreement. The final Transition Services Agreement will be executed at or prior to the Closing Date in substantially this form, with the Schedules completed by agreement of the Parties.]

Right-click to update Table of Contents

TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this "Agreement") is made and entered into as of [__, 20] (the "Effective Date"), by and between:

[Insert name of entity providing services], a [__] organized under the laws of [__], with its principal place of business at [____] (the "Service Provider");

and

[Insert name of entity receiving services], a [__] organized under the laws of [__], with its principal place of business at [____] (the "Service Recipient" and, together with the Service Provider, the "Parties" and each, a "Party").

[Guidance Note: The identity of the Service Provider and Service Recipient will be determined based on the final allocation of transitional service responsibilities agreed prior to the Closing Date. The Service Provider may be the Surviving Corporation, one or more of its subsidiaries, or an affiliate of the Buyer, depending on the direction of services. The Service Recipient may be an affiliate of the Buyer or the Surviving Corporation and/or its subsidiaries, depending on the direction of services. Where services flow in both directions, each Party may serve as both Service Provider and Service Recipient, with separate Service Schedules for each direction of service. The Parties and their respective roles will be determined based on the final allocation of transitional service responsibilities agreed prior to the Closing Date.]

RECITALS

WHEREAS, Cloudium Technologies plc, a public limited company organized under the laws of England and Wales ("Buyer"), Stratos Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Buyer ("Merger Sub"), and Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership ("Target"), entered into that certain Agreement and Plan of Merger, dated as of January 22, 2024 (as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms, the "Merger Agreement"), pursuant to which Merger Sub merged with and into Target, with Target surviving as a wholly owned subsidiary of Buyer (the "Merger");

WHEREAS, in connection with and following the consummation of the Merger, the Parties have agreed to enter into this Agreement to facilitate an orderly transition of certain business operations, information technology systems, and administrative and operational support functions, and to ensure continuity of essential services during the transition period following the closing of the Merger;

WHEREAS, this Agreement is being entered into pursuant to and in connection with Section [__] of the Merger Agreement, which contemplates the execution and delivery of a transition services agreement in substantially the form attached as an exhibit thereto; and

WHEREAS, certain of the Transition Services (as defined below) may be provided by or through qualified third-party subcontractors, and the Parties acknowledge and agree that the engagement of such subcontractors shall be subject to the terms and conditions of this Agreement.

[Placeholder for any additional recitals as may be needed based on the final structure of the Transition Services.]

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

Section 1.1 — Defined Terms

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement. As used in this Agreement, the following terms shall have the meanings set forth below:

"Applicable Law" means, with respect to any Person, all federal, state, provincial, local, municipal, foreign, international, multinational, or other laws (including common law), constitutions, statutes, codes, decrees, rules, regulations, by-laws, ordinances, directives, orders, injunctions, judgments, awards, or decrees of, or agreements with, any Governmental Authority that are binding upon or applicable to such Person or any of its properties, assets, officers, directors, employees, consultants, or agents, in each case as amended from time to time and including all binding judicial and administrative interpretations thereof.

"Business Day" means any day that is not a Saturday, Sunday, or other day on which commercial banks in New York, New York or London, England are authorized or required by Applicable Law to remain closed. This definition is intended to be consistent with the definition of "Business Day" set forth in the Merger Agreement, and to the extent of any conflict between this definition and the definition in the Merger Agreement, the definition in the Merger Agreement shall control.

"Closing Date" means the date on which the closing of the Merger occurs pursuant to and in accordance with the terms of the Merger Agreement.

"Confidential Information" means all proprietary, confidential, business, technical, financial, operational, and other non-public information, whether in written, oral, electronic, visual, or other form, that is disclosed by or on behalf of one Party (or its affiliates) to the other Party (or its affiliates) in connection with the negotiation, execution, or performance of this Agreement, including: (a) trade secrets, know-how, inventions, processes, techniques, algorithms, and software; (b) business plans, strategies, forecasts, projections, and budgets; (c) financial statements, reports, and data; (d) customer and supplier lists, pricing information, and contract terms; (e) employee information and personnel records; (f) information regarding information technology systems, network configurations, security protocols, and data architectures; and (g) any analyses, compilations, studies, notes, or other documents prepared by or on behalf of a Party that contain, reflect, or are derived from any of the foregoing. Confidential Information shall not include information that: (i) is or becomes generally available to the public other than as a result of a disclosure by the receiving Party or its representatives in violation of this Agreement; (ii) was available to the receiving Party on a non-confidential basis prior to its disclosure by the disclosing Party; (iii) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party or its representatives, provided that such source is not, to the receiving Party's knowledge, bound by a confidentiality agreement with, or other contractual, legal, or fiduciary obligation of confidentiality to, the disclosing Party; or (iv) is independently developed by the receiving Party without use of or reference to the disclosing Party's Confidential Information.

"Facilities Services" means the services described on Schedule D attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.

"Finance and Accounting Services" means the services described on Schedule B attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.

"Force Majeure Event" means any event or circumstance beyond the reasonable control of the affected Party, including: acts of God; floods, earthquakes, hurricanes, tornados, and other natural disasters; epidemics, pandemics, or quarantine restrictions; war (whether declared or undeclared), armed conflict, military action, invasion, or insurrection; acts of terrorism, sabotage, or piracy; riots, civil unrest, or civil commotion; strikes, lockouts, or other labor disputes (other than those involving the affected Party's own employees, unless such labor dispute is industry-wide); embargoes, sanctions, or blockades; fire or explosion; power outages or failures of telecommunications or information technology infrastructure not caused by the affected Party; and any action, regulation, order, or decree of any Governmental Authority (including the imposition of export controls, import restrictions, or other governmental restrictions or requirements); provided, however, that (x) the unavailability of funds, general economic conditions, changes in market conditions, or the financial condition of a Party shall not constitute a Force Majeure Event and (y) the failure to obtain any required third-party consent shall not constitute a Force Majeure Event except to the extent such failure results from a Force Majeure Event otherwise described in this definition.

"General and Administrative Services" means the services described on Schedule E attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.

"Historical Standard" has the meaning set forth in Section 2.1.

"Human Resources Services" means the services described on Schedule C attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.

"IT Services" means the services described on Schedule A attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.

"Merger Agreement" means the Agreement and Plan of Merger, dated as of January 22, 2024, among Cloudium Technologies plc, Stratos Merger Sub Inc., and Solara Digital Infrastructure Fund VI LP, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.

"Migration Plan" means the plan developed by the Parties (or to be developed by the Parties) for the transition and migration of each Transition Service from the Service Provider to the Service Recipient or to a replacement provider designated by the Service Recipient, as further described in Section 3.4 and Schedule G.

"Omitted Service" has the meaning set forth in Section 2.3.

"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, Governmental Authority, or any other entity or body.

"Personal Data" means any information relating to an identified or identifiable natural person, to the extent that such information is protected as "personal data," "personal information," "personally identifiable information," or any analogous term under Applicable Law.

"Service Fees" means the fees payable by the Service Recipient to the Service Provider for the Transition Services, as set forth in the applicable Service Schedule, summarized in Schedule F, and subject to the provisions of Article IV.

"Service Level" means the level, volume, quality, timeliness, and standard of performance of a Transition Service as described in the applicable Service Schedule, subject to the Historical Standard and the other provisions of this Agreement.

"Service Period" means, with respect to each Transition Service, the period during which such Transition Service is to be provided by the Service Provider to the Service Recipient, as specified in the applicable Service Schedule, subject to early termination, extension, or other modification as provided in Article III.

"Service Provider" has the meaning set forth in the preamble to this Agreement.

"Service Provider Personnel" means the employees, officers, agents, independent contractors, subcontractors, consultants, and other personnel of the Service Provider or its affiliates who are engaged in the performance of the Transition Services.

"Service Recipient" has the meaning set forth in the preamble to this Agreement.

"Service Schedules" means Schedules A through E attached hereto (and such additional schedules as may be added by mutual written agreement of the Parties), each of which describes one or more categories of Transition Services to be provided under this Agreement.

"Steering Committee" has the meaning set forth in Section 7.1.

"Transition Services" means the services described in the Service Schedules, together with any Omitted Services added pursuant to Section 2.3 and any other services added by mutual written agreement of the Parties in accordance with this Agreement.

"Wind-Down Costs" has the meaning set forth in Section 3.2.

Section 1.2 — Interpretation

The following rules of interpretation shall apply to this Agreement:

(a) The headings, captions, and titles of the Articles, Sections, and Schedules of this Agreement are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of this Agreement.

(b) Words importing the singular number shall include the plural and vice versa, and words importing any gender shall include all genders.

(d) Unless the context otherwise requires, references to "days" shall mean calendar days. Where this Agreement specifies a period of "Business Days," such period shall be calculated by excluding any day that is not a Business Day.

(e) All references to currency, monetary values, and dollar amounts shall refer to United States dollars unless otherwise expressly stated.

(f) References to any statute, law, regulation, or rule shall be deemed to include all amendments, modifications, supplements, and successor legislation thereto, and all rules and regulations promulgated thereunder, in each case as in effect from time to time.

(g) References to any agreement, instrument, or document shall be deemed to refer to such agreement, instrument, or document as it may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.

(h) References to "Sections," "Articles," and "Schedules" shall be references to the Sections, Articles, and Schedules of this Agreement, unless otherwise specified.

(i) The terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement (including all Schedules).

(j) Each Party acknowledges that it has been represented by counsel in connection with this Agreement, and accordingly, any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation or construction of this Agreement.

ARTICLE II — TRANSITION SERVICES

Section 2.1 — Provision of Transition Services

(a) Subject to the terms and conditions of this Agreement, the Service Provider shall provide (or shall cause to be provided) to the Service Recipient the Transition Services described in each Service Schedule during the applicable Service Period. The Service Provider shall perform the Transition Services with reasonable care and in a professional and workmanlike manner, consistent with the nature, quality, standard, timeliness, and level of the corresponding services provided by or to the applicable business in the ordinary course during the twelve (12)-month period immediately prior to the Closing Date (the "Historical Standard"). The Service Provider shall allocate sufficient resources, including qualified personnel and appropriate infrastructure, to meet the Historical Standard.

(b) Notwithstanding anything to the contrary in this Agreement, the Service Provider shall have no obligation to provide any Transition Service at a level that is materially higher or more comprehensive than the Historical Standard, and any request by the Service Recipient for services that materially exceed the Historical Standard shall be subject to mutual written agreement of the Parties, including agreement on any incremental costs associated therewith.

(c) The Transition Services shall be provided on a non-exclusive basis. The Service Provider retains the unrestricted right to provide the same or similar services to its own operations, its affiliates, and any other third parties during the term of this Agreement, provided that the provision of such services to third parties does not materially impair the Service Provider's ability to perform the Transition Services in accordance with the terms of this Agreement.

(d) The geographic scope of the Transition Services shall be as specified in the applicable Service Schedule. Unless otherwise expressly stated in a Service Schedule, the Transition Services are expected to be provided in and for the benefit of operations located in the United States, the United Kingdom, India, and Germany, as applicable to the relevant categories of services described herein. The Parties acknowledge that certain Transition Services may require the provision of support across multiple jurisdictions and time zones, and the Service Provider shall use commercially reasonable efforts to accommodate such cross-jurisdictional requirements in a manner consistent with the Historical Standard.

Section 2.2 — Service Schedules

(a) Each category of Transition Services shall be described in a separate Service Schedule attached to this Agreement. Each Service Schedule shall specify the following information for each Transition Service (or group of related Transition Services) described therein:

(i) a reasonably detailed description of the Transition Service to be provided;

(ii) the name, title, and contact information of the Service Provider's designated service manager or contact person for such Transition Service;

(iii) the name, title, and contact information of the Service Recipient's designated service manager or contact person for such Transition Service;

(iv) the applicable Service Level, including any quantitative performance metrics, service-level agreements, response times, or other measurable standards, to the extent applicable to such Transition Service;

(v) the Service Period for such Transition Service, including the start date (which, unless otherwise specified, shall be the Closing Date) and the scheduled end date;

(vi) the Service Fees or fee methodology applicable to such Transition Service, including whether fees are calculated on a cost-plus, fixed-fee, time-and-materials, or other basis;

(vii) a description of any third-party consents, licenses, sublicenses, or subcontracting arrangements required in connection with the provision of such Transition Service, together with a summary of any actions required to obtain such consents or licenses;

(viii) any specific data-handling, data-privacy, information-security, or regulatory requirements applicable to such Transition Service, including any requirements arising under data-protection laws applicable to the jurisdictions in which the Transition Service is provided or in which data subjects are located; and

(ix) a summary of the migration and wind-down plan timeline for such Transition Service, including key milestones, target migration completion dates, and the allocation of responsibilities between the Parties.

(b) The Service Schedules shall be completed by the Parties, acting in good faith, prior to the Closing Date and shall be attached hereto at the time of execution of this Agreement. To the extent any Service Schedule is not finalized as of the date of execution, the Parties shall use commercially reasonable efforts to complete and attach such Service Schedule within fifteen (15) Business Days following the Closing Date.

Section 2.3 — Omitted Services

(a) If, within ninety (90) days following the Closing Date, the Service Recipient identifies a service that: (i) was provided by or to the applicable business in the ordinary course during the twelve (12)-month period immediately prior to the Closing Date; (ii) is reasonably necessary for the continued operation of the Service Recipient's business; and (iii) was inadvertently omitted from the Service Schedules, the Service Recipient may submit a written request to the Service Provider to add such service as an "Omitted Service" under this Agreement.

(b) Upon receipt of a written request pursuant to Section 2.3(a), the Service Provider shall use commercially reasonable efforts to provide (or cause to be provided) the Omitted Service on terms and conditions (including pricing) that are consistent with the terms and conditions of this Agreement and the pricing methodology set forth in Article IV. The Parties acknowledge that commercially reasonable efforts shall not require the Service Provider to hire additional personnel, acquire additional equipment or software, or enter into new third-party agreements beyond what is commercially reasonable in the circumstances.

(c) The procedure for adding an Omitted Service shall be as follows: (i) the Service Recipient shall deliver a written request to the Service Provider describing the Omitted Service in reasonable detail; (ii) the Parties shall negotiate in good faith the terms and conditions applicable to such Omitted Service, including the Service Level, Service Period, and Service Fees; and (iii) upon agreement of the Parties, the applicable Service Schedule shall be amended (or a new Service Schedule shall be added) to reflect the Omitted Service. The Parties shall use commercially reasonable efforts to complete such negotiation and execute the applicable amendment within fifteen (15) Business Days of the Service Provider's receipt of the initial written request. Any Omitted Service added pursuant to this Section 2.3 shall be deemed a Transition Service for all purposes of this Agreement.

Section 2.4 — Subcontracting

(a) The Service Provider may subcontract the performance of all or any portion of the Transition Services to qualified third-party subcontractors, subject to the following conditions:

(i) The Service Provider shall provide the Service Recipient with reasonable prior written notice of any proposed subcontracting arrangement, including the identity of the proposed subcontractor, a description of the services to be subcontracted, and the qualifications of the proposed subcontractor. With respect to any subcontractor that will have access to or process Confidential Information or Personal Data of the Service Recipient, the Service Provider shall obtain the prior written consent of the Service Recipient before engaging such subcontractor, which consent shall not be unreasonably withheld, conditioned, or delayed.

(ii) Notwithstanding any subcontracting arrangement, the Service Provider shall remain fully responsible for the performance of the subcontracted Transition Services and for any acts or omissions of any subcontractor to the same extent as if the Service Provider had performed such services directly. The engagement of a subcontractor shall not relieve the Service Provider of any of its obligations under this Agreement.

(iii) The Service Provider shall ensure that each subcontractor is bound by written confidentiality obligations that are at least as protective as the confidentiality obligations set forth in Article VI of this Agreement, and by data-protection obligations that are consistent with the requirements of Section 6.2 and Schedule H (to the extent applicable).

(b) The Parties acknowledge that certain Transition Services may currently be provided through third-party vendors pursuant to pre-existing contractual arrangements. With respect to any such third-party vendor arrangement, the Service Provider shall use commercially reasonable efforts to maintain, renew, or extend such arrangement for the duration of the applicable Service Period. If the continued provision of a Transition Service through a third-party vendor requires the consent of such vendor and such consent cannot be obtained after the Service Provider has exercised commercially reasonable efforts to obtain it, the Service Provider's obligation with respect to such Transition Service shall be limited to providing a commercially reasonable alternative that, to the extent practicable, achieves substantially the same result for the Service Recipient.

Section 2.5 — Cooperation

(a) Each Party shall cooperate fully and in good faith with the other Party to facilitate the orderly provision, receipt, and ultimate migration of the Transition Services. Such cooperation shall include, without limitation, the timely exchange of information, data, and documentation reasonably necessary for the performance of the Transition Services, the prompt identification and resolution of operational issues, and the good-faith negotiation of any amendments or modifications to the Service Schedules that may be necessary or appropriate from time to time.

(b) The Service Recipient shall provide the Service Provider with reasonable access to its facilities, systems, personnel, and information as may be necessary for the Service Provider to perform the Transition Services in accordance with this Agreement. The Service Recipient shall designate qualified personnel to interface with the Service Provider's personnel, shall respond promptly to reasonable requests for information and approvals, and shall comply with any reasonable policies, procedures, and guidelines established by the Service Provider in connection with the Transition Services.

(c) The Service Provider shall provide reasonable cooperation with the Service Recipient's efforts to establish independent capabilities and to transition away from the Transition Services. Such cooperation shall include, without limitation, making Service Provider Personnel reasonably available for consultation, knowledge transfer, and training during the applicable Service Period and the wind-down period described in Section 3.4.

ARTICLE III — SERVICE PERIODS AND TERMINATION OF INDIVIDUAL SERVICES

Section 3.1 — Service Periods

(a) Each Transition Service shall be provided for the Service Period specified in the applicable Service Schedule. The Service Period for each Transition Service shall commence on the start date specified in the applicable Service Schedule (which, unless otherwise expressly stated therein, shall be the Closing Date) and shall expire on the end date specified therein, unless earlier terminated in accordance with Section 3.2 or extended in accordance with Section 3.3.

(b) The maximum overall Service Period for any individual Transition Service shall be twelve (12) months from the Closing Date, unless extended pursuant to Section 3.3. In no event shall the aggregate Service Period (including any extensions granted pursuant to Section 3.3) for any individual Transition Service exceed eighteen (18) months from the Closing Date.

[Guidance Note: Individual Service Periods may be shorter than the maximum overall period. The specific end date for each Transition Service will be set forth in the applicable Service Schedule based on the anticipated timeline for migration to the Service Recipient's independent capabilities. The Parties are encouraged to establish Service Periods that are tailored to the complexity and criticality of each Transition Service.]

Section 3.2 — Early Termination of Individual Services

(a) The Service Recipient may terminate any individual Transition Service (in whole or in part) at any time upon not less than thirty (30) days' prior written notice to the Service Provider, specifying the Transition Service (or portion thereof) to be terminated and the effective date of such termination.

(b) Upon the early termination of any Transition Service pursuant to this Section 3.2, the Service Recipient shall pay to the Service Provider: (i) all accrued and unpaid Service Fees with respect to such Transition Service through the effective date of termination; and (ii) any documented, reasonable, non-cancellable third-party costs actually incurred by the Service Provider in connection with the provision of the terminated Transition Service to the extent such costs were incurred prior to the date on which the Service Provider received the termination notice and cannot be avoided, mitigated, or recovered by the Service Provider after the exercise of commercially reasonable efforts (such costs, together, the "Wind-Down Costs"). The Service Provider shall use commercially reasonable efforts to minimize Wind-Down Costs and shall provide the Service Recipient with reasonable documentation supporting any Wind-Down Costs invoiced.

(c) Unless otherwise specified in the applicable Service Schedule, the Service Recipient shall not be entitled to any partial-month credit or refund of Service Fees for any partial month in which a Transition Service is terminated prior to the end of such month. For the avoidance of doubt, any Transition Service that is terminated on a date other than the last day of a calendar month shall be deemed to have been provided for the entire calendar month in which such termination occurs for purposes of calculating the applicable Service Fee, unless the applicable Service Schedule expressly provides otherwise.

Section 3.3 — Extension of Service Periods

(a) The Service Recipient may request an extension of the Service Period for any individual Transition Service for up to two (2) additional periods of three (3) months each (for a maximum total extension of six (6) months) by providing written notice to the Service Provider at least forty-five (45) days before the expiration of the then-current Service Period for such Transition Service. Each such extension request shall identify the Transition Service(s) for which an extension is sought and the requested duration of the extension.

(b) Any extension of a Service Period shall be subject to the mutual written agreement of the Parties, which agreement shall not be unreasonably withheld, conditioned, or delayed by the Service Provider. In considering whether to agree to an extension, the Service Provider may take into account the availability of personnel and resources, the impact of the extension on the Service Provider's own operations and business plans, and any incremental costs or burdens associated with the continued provision of the applicable Transition Service.

(d) In no event shall the aggregate Service Period for any individual Transition Service (including the initial Service Period and all extensions granted pursuant to this Section 3.3) exceed eighteen (18) months from the Closing Date. Any request by the Service Recipient for an extension that would cause the aggregate Service Period for a Transition Service to exceed eighteen (18) months from the Closing Date shall be of no force or effect.

Section 3.4 — Migration and Wind-Down

(a) The Parties shall cooperate in good faith to develop a Migration Plan for each Transition Service, targeting the completion of each migration within the applicable Service Period. The Migration Plan shall identify the key activities, milestones, deliverables, and timelines for transitioning each Transition Service from the Service Provider to the Service Recipient (or to a replacement provider designated by the Service Recipient). The framework for the Migration Plan is set forth on Schedule G, and the detailed Migration Plan for each Transition Service shall be incorporated into the applicable Service Schedule or into a supplemental schedule attached hereto.

(b) During the wind-down period for each Transition Service (which shall commence upon the earlier of (i) sixty (60) days prior to the scheduled end of the applicable Service Period, or (ii) the date on which a notice of early termination is delivered pursuant to Section 3.2), the Service Provider shall provide reasonable transition assistance to the Service Recipient, including:

(i) knowledge transfer relating to the applicable Transition Service, including the provision of documentation, process descriptions, standard operating procedures, and configuration information reasonably necessary for the Service Recipient to assume or replicate the Transition Service independently;

(ii) making Service Provider Personnel who have been primarily responsible for the applicable Transition Service reasonably available for consultation, training, and question-and-answer sessions with the Service Recipient's personnel; and

(iii) cooperating with the Service Recipient and any replacement provider in connection with the testing, validation, and parallel operation of replacement systems and services during the migration period.

[Guidance Note: The Migration Plan framework will be attached as Schedule G or incorporated into each Service Schedule. The Parties should develop the detailed Migration Plan jointly prior to or promptly following the Closing Date.]

ARTICLE IV — SERVICE FEES AND PAYMENT

Section 4.1 — Service Fees

(a) In consideration of the Transition Services provided hereunder, the Service Recipient shall pay to the Service Provider the Service Fees specified in the applicable Service Schedule (and summarized in Schedule F — Fee Schedule) in accordance with the terms and conditions of this Article IV.

(b) Unless otherwise expressly provided in the applicable Service Schedule, Service Fees shall be calculated on a cost-plus basis, reflecting the Service Provider's fully loaded internal cost of providing each Transition Service (including, without limitation, direct labor costs, allocated overhead, and out-of-pocket expenses directly attributable to the performance of such Transition Service), plus a margin of [__]% (the "Margin").

[Guidance Note: The applicable Margin is typically in the range of 0% to 10% and is to be negotiated and agreed upon by the Parties prior to execution. A Margin of 0% (i.e., cost-only) may be appropriate for reverse transition services or where the Merger Agreement requires the provision of services at cost.]

(c) Third-party costs incurred by the Service Provider in connection with the provision of the Transition Services (including, without limitation, fees payable to third-party vendors, software licensing fees, hosting costs, and similar expenses) shall be passed through to the Service Recipient at actual cost, without mark-up, unless otherwise expressly specified in the applicable Service Schedule. The Service Provider shall provide the Service Recipient with reasonable documentation supporting any third-party costs invoiced.

Section 4.2 — Pricing During Extension Periods

During any extension period approved pursuant to Section 3.3, the Service Fees for the extended Transition Service shall increase by [__]% above the applicable Service Fee for the immediately preceding Service Period (the "Extension Step-Up"). For clarity, if a Transition Service is extended for a second extension period, the Service Fee during such second extension period shall be calculated by applying the Extension Step-Up to the Service Fee in effect during the first extension period (i.e., the step-up is cumulative).

[Guidance Note: The Extension Step-Up is typically in the range of 5% to 15% per extension period, and is intended to incentivize the Service Recipient to complete migration within the initial Service Period. The applicable percentage is to be negotiated and agreed upon by the Parties prior to execution.]

Section 4.3 — Invoicing and Payment

(a) The Service Provider shall deliver to the Service Recipient monthly invoices within fifteen (15) days following the end of each calendar month during the term of this Agreement (or such shorter period as may correspond to a partial month at the beginning or end of the term). Each invoice shall be itemized by Transition Service (referencing the applicable Service Schedule and Service ID), shall set forth in reasonable detail the basis for the fees charged (including a description of the services performed, the applicable fee methodology, any third-party costs incurred, and the calculation of the amount due), and shall be accompanied by such supporting documentation as the Service Recipient may reasonably request.

(b) Each properly submitted invoice shall be payable within thirty (30) days of the Service Recipient's receipt thereof. Payments shall be made by wire transfer of immediately available funds to the bank account designated in writing by the Service Provider from time to time.

(c) All payments under this Agreement shall be made in United States dollars. With respect to Transition Services provided outside the United States for which costs are denominated in a currency other than United States dollars, such costs shall be converted to United States dollars using the spot exchange rate published by Westmark Services Inc. (or, if unavailable, such other commercially recognized source as the Parties may agree) as of the last Business Day of the applicable calendar month in which such costs were incurred.

(d) Any amount not paid when due shall bear interest from the date such payment was due until the date of actual payment at a rate equal to the lesser of (i) the prime rate as published in The Wall Street Journal on the date such payment was due, plus two percent (2%) per annum, and (ii) the maximum rate permitted by Applicable Law.

Section 4.4 — Disputed Invoices

(a) If the Service Recipient disputes any portion of an invoice in good faith, the Service Recipient shall: (i) pay the undisputed portion of such invoice when due in accordance with Section 4.3(b); and (ii) deliver written notice to the Service Provider of the disputed items within fifteen (15) days of the Service Recipient's receipt of the applicable invoice, setting forth in reasonable detail the basis for such dispute, the specific line items or amounts disputed, and the Service Recipient's calculation of the amount it believes to be correct.

(b) Upon receipt of a notice of dispute, the Parties shall negotiate in good faith to resolve the disputed amounts within thirty (30) days. During such negotiation period, each Party shall provide the other Party with such information and documentation as may be reasonably requested to facilitate resolution of the dispute.

(c) If the disputed amounts are not resolved within thirty (30) days following the date of the dispute notice, the dispute shall be escalated to the Steering Committee for resolution in accordance with Section 7.1. If the Steering Committee is unable to resolve the dispute within an additional fifteen (15) Business Days, the dispute shall be submitted to the dispute resolution procedures set forth in Article X.

(d) Upon final resolution of any disputed amount, the Party owing such amount shall pay the amount due (together with interest thereon calculated in accordance with Section 4.3(d) from the original due date) within ten (10) Business Days of such resolution.

Section 4.5 — Taxes

(a) All Service Fees stated in this Agreement and in the Service Schedules are exclusive of all applicable sales, use, value-added, goods-and-services, and similar transaction-based taxes, levies, duties, and governmental charges (collectively, "Transaction Taxes"). The Service Recipient shall be responsible for and shall pay all Transaction Taxes imposed on or with respect to the Transition Services provided under this Agreement, unless the Service Recipient provides the Service Provider with a valid tax-exemption certificate or other documentation acceptable to the relevant taxing authority.

(b) Each Party shall be responsible for its own income, franchise, capital, and similar taxes imposed on such Party's net income or capital.

(c) With respect to cross-border Transition Services provided between entities located in the United States, the United Kingdom, India, and Germany (or any other jurisdictions in which Transition Services are provided), the Parties shall cooperate in good faith to determine the appropriate withholding tax treatment, if any, applicable to payments under this Agreement. If any withholding tax is required to be deducted or withheld from any payment under this Agreement, the payor shall: (i) deduct or withhold such tax in the amount required by Applicable Law; (ii) remit the withheld amount to the appropriate Governmental Authority in accordance with Applicable Law; and (iii) provide the payee with a receipt or other evidence of such withholding and remittance within a commercially reasonable time following such remittance. Unless otherwise agreed by the Parties, the payee shall bear the economic burden of any withholding tax, and the payor shall not be required to "gross up" any payment on account of such withholding.

(d) The Parties shall cooperate in good faith to minimize the overall tax burden associated with the Transition Services, including by providing each other with all reasonably requested tax-related documentation, such as IRS Forms W-9, W-8BEN-E, and equivalent foreign forms, certificates of tax residence, and any other documentation necessary to claim applicable exemptions or reduced rates under applicable tax treaties.

Section 4.6 — Set-Off

Neither Party shall have any right to set off, offset, deduct, or withhold any amounts owed under this Agreement against any other amounts owed by the other Party under this Agreement, the Merger Agreement, or any other agreement, without the prior written consent of the other Party; provided, however, that this Section 4.6 shall not limit (a) the right of either Party to set off indemnification obligations under Article IX against amounts owed under this Agreement, to the extent permitted under Article IX, or (b) any set-off agreed to by the Steering Committee in connection with the resolution of a disputed invoice or other dispute under this Agreement.

ARTICLE V — STANDARD OF SERVICES; LIMITATIONS

Section 5.1 — Standard of Care

(a) The Service Provider shall perform the Transition Services with the same degree of care, skill, diligence, and competence as it used to provide (or cause to be provided) the same or substantially similar services during the twelve (12)-month period immediately prior to the Closing Date. The Service Provider shall not be required to perform any Transition Service at a level that materially exceeds the Historical Standard, and the Service Provider's performance shall be measured against the Historical Standard in determining whether the Service Provider has satisfied its obligations under this Agreement.

(b) Except as otherwise expressly provided in a Service Schedule, the Service Provider shall have no obligation to: (i) hire additional employees or personnel; (ii) acquire, lease, license, or maintain additional equipment, software, or other technology; (iii) maintain the employment or services of any specific individual; or (iv) make capital expenditures, in each case in connection with the provision of the Transition Services. Notwithstanding the foregoing, the Service Provider shall use commercially reasonable efforts to maintain adequate staffing levels and resources to perform the Transition Services in accordance with the Historical Standard and the applicable Service Levels.

Section 5.2 — Changes in Services

The Service Provider may make changes to the manner, method, processes, tools, systems, or technology used to provide the Transition Services from time to time, provided that:

(a) such changes are consistent with changes made by the Service Provider to its own operations or to the services it provides to its own affiliates in the ordinary course of business;

(b) such changes do not materially degrade the applicable Service Level or materially adversely affect the quality, timeliness, or reliability of the applicable Transition Service as compared to the Historical Standard; and

(c) the Service Provider provides the Service Recipient with reasonable advance written notice of any material changes, and to the extent practicable, consults with the Service Recipient regarding the timing and implementation of such changes.

In the event that any change implemented by the Service Provider results in a material degradation of a Transition Service, the Service Recipient shall promptly notify the Service Provider, and the Service Provider shall use commercially reasonable efforts to restore the affected Transition Service to a level consistent with the Historical Standard.

Section 5.3 — Exclusion of Warranties

(a) ALL TRANSITION SERVICES ARE PROVIDED "AS IS" AND "AS AVAILABLE." EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT (INCLUDING THE HISTORICAL STANDARD AND ANY EXPRESS SERVICE LEVELS SET FORTH IN THE SERVICE SCHEDULES), NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO THE TRANSITION SERVICES, AND EACH PARTY HEREBY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, ACCURACY, TITLE, AND NON-INFRINGEMENT, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING, USAGE, OR TRADE PRACTICE.

(b) For the avoidance of doubt, the disclaimer set forth in this Section 5.3 shall not limit or modify the Service Provider's obligations under the Historical Standard as set forth in Section 2.1 or any express Service Levels set forth in the applicable Service Schedules.

Section 5.4 — Limitation of Liability

(a) EXCEPT AS PROVIDED IN SECTION 5.4(c), THE AGGREGATE LIABILITY OF THE SERVICE PROVIDER TO THE SERVICE RECIPIENT UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE, SHALL NOT EXCEED [INSERT CAP, E.G., AN AMOUNT EQUAL TO THE AGGREGATE SERVICE FEES PAID OR PAYABLE BY THE SERVICE RECIPIENT TO THE SERVICE PROVIDER DURING THE TWELVE (12) MONTHS PRECEDING THE DATE ON WHICH THE APPLICABLE CLAIM FIRST AROSE].

(b) EXCEPT AS PROVIDED IN SECTION 5.4(c), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR LOST PROFITS, LOST REVENUE, LOSS OF BUSINESS OPPORTUNITY, LOSS OF DATA, DIMINUTION IN VALUE, OR BUSINESS INTERRUPTION, WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR SUCH DAMAGES WERE OTHERWISE FORESEEABLE.

(c) The limitations and exclusions set forth in Sections 5.4(a) and 5.4(b) shall not apply to: (i) losses arising from a Party's fraud or willful misconduct; (ii) losses arising from a Party's breach of its confidentiality obligations under Article VI; or (iii) a Party's indemnification obligations under Article IX with respect to third-party claims.

[Guidance Note: The specific liability cap and the scope of carve-outs from the limitation of liability are to be negotiated and finalized by the Parties prior to execution. The Parties should consider whether additional carve-outs are appropriate, such as for breaches of data-protection obligations or for intellectual property infringement.]

ARTICLE VI — CONFIDENTIALITY AND DATA PROTECTION

Section 6.1 — Confidentiality

(a) Each Party (in its capacity as a receiving party) shall maintain the confidentiality of all Confidential Information received from the other Party (in its capacity as a disclosing party) in connection with this Agreement, and shall not disclose such Confidential Information to any third party without the prior written consent of the disclosing party, except as expressly permitted by this Section 6.1. Each Party shall protect the other Party's Confidential Information with at least the same degree of care that it uses to protect its own confidential information of like nature and importance, but in no event with less than reasonable care.

(b) Each Party may disclose the other Party's Confidential Information: (i) to its directors, officers, employees, agents, consultants, accountants, auditors, legal advisors, lenders, investors, and other representatives (collectively, "Representatives") who have a need to know such information in connection with the performance or receipt of the Transition Services and who are bound by confidentiality obligations at least as protective as those set forth herein; (ii) to its affiliates and their respective Representatives to the same extent and subject to the same conditions; and (iii) to any subcontractor engaged in accordance with Section 2.4 that has a need to know such information in connection with the performance of the subcontracted services and that is bound by confidentiality obligations at least as protective as those set forth herein. Each Party shall be responsible for any breach of this Section 6.1 by its Representatives, affiliates, or subcontractors.

(c) The confidentiality obligations set forth in this Section 6.1 shall not apply to Confidential Information that: (i) is or becomes generally available to the public other than as a result of a disclosure by the receiving party or its Representatives in violation of this Agreement; (ii) was available to the receiving party on a non-confidential basis prior to its disclosure by the disclosing party, as evidenced by the receiving party's contemporaneous written records; (iii) becomes available to the receiving party on a non-confidential basis from a source other than the disclosing party or its Representatives, provided that such source is not, to the receiving party's knowledge, bound by a confidentiality agreement with, or other contractual, legal, or fiduciary obligation of confidentiality to, the disclosing party with respect to such information; or (iv) is independently developed by the receiving party without use of or reference to the disclosing party's Confidential Information, as evidenced by the receiving party's contemporaneous written records.

(d) Notwithstanding the foregoing, either Party may disclose Confidential Information to the extent required by Applicable Law, legal process, regulation, or the rules of any applicable securities exchange; provided that the disclosing party shall, to the extent legally permissible and reasonably practicable, (i) provide the other Party with prompt advance written notice of such required disclosure so as to enable the other Party to seek a protective order, confidential treatment, or other appropriate remedy, and (ii) cooperate with the other Party's reasonable efforts to obtain such protective order or other remedy. If such protective order or other remedy is not obtained, the disclosing party shall disclose only that portion of the Confidential Information that is legally required to be disclosed.

(e) The obligations of confidentiality set forth in this Section 6.1 shall survive the expiration or termination of this Agreement for a period of two (2) years from the date of such expiration or termination.

Section 6.2 — Data Protection and Privacy

(a) Each Party shall comply with all applicable data-protection and privacy laws in connection with the performance and receipt of the Transition Services, including, without limitation:

(i) the UK General Data Protection Regulation (the "UK GDPR") as it forms part of the law of England and Wales, Scotland, and Northern Ireland by virtue of Section 3 of the European Union (Withdrawal) Act 2018, together with the Data Protection Act 2018;

(ii) the EU General Data Protection Regulation (Regulation (EU) 2016/679) (the "EU GDPR"), to the extent applicable to processing activities involving personal data of data subjects located in the European Economic Area;

(iii) applicable U.S. federal and state privacy and data-protection laws, including, without limitation, the California Consumer Privacy Act (as amended by the California Privacy Rights Act), the Health Insurance Portability and Accountability Act (to the extent applicable), and any other state privacy laws applicable to the personal data processed in connection with the Transition Services;

(iv) the Information Technology Act, 2000 (India), the Digital Personal Data Protection Act, 2023 (India), and the rules and regulations promulgated thereunder, to the extent applicable to personal data of data subjects located in India; and

(v) any other data-protection or privacy laws applicable to the processing of personal data in connection with the Transition Services.

(b) To the extent that the Service Provider processes Personal Data on behalf of the Service Recipient in connection with the provision of any Transition Service, the Parties shall execute and attach a Data Processing Addendum in the form of Schedule H, which shall set forth the scope, nature, and purpose of such processing, the categories of data subjects and types of Personal Data processed, the processing instructions, security measures, subprocessor arrangements, breach-notification obligations, audit rights, and other terms required by Applicable Law.

(c) To the extent that the Transition Services involve the transfer of Personal Data across international borders (including transfers from the United Kingdom or the European Economic Area to the United States, India, or any other country that has not been deemed to provide an adequate level of data protection), the Parties shall implement appropriate transfer mechanisms as required by Applicable Law, including, as applicable, the UK International Data Transfer Agreement, the EU Standard Contractual Clauses (Commission Implementing Decision (EU) 2021/914), or such other approved transfer mechanisms as may be required. The Parties shall cooperate in good faith to identify and implement the appropriate transfer mechanisms for each category of cross-border data transfer.

[Guidance Note: Schedule H — Data Processing Addendum will be completed prior to execution based on the specific categories of personal data processed under the Transition Services. The DPA must comply with UK GDPR, EU GDPR (to the extent applicable), and applicable U.S. and Indian data-protection laws.]

Section 6.3 — Information Security

(a) The Service Provider shall implement and maintain administrative, technical, and physical security measures designed to protect the confidentiality, integrity, and availability of the Service Recipient's data (including Personal Data) processed in connection with the Transition Services. Such measures shall be consistent with, and no less protective than, those in effect during the twelve (12)-month period immediately prior to the Closing Date, and shall comply with all applicable information-security requirements set forth in the Service Schedules and Schedule H.

(b) In the event of any actual or reasonably suspected security incident, data breach, or unauthorized access, disclosure, use, loss, destruction, or alteration of the Service Recipient's data (including Personal Data) in the Service Provider's possession or control (a "Security Incident"), the Service Provider shall: (i) notify the Service Recipient in writing as promptly as reasonably practicable, and in any event within seventy-two (72) hours of becoming aware of such Security Incident; (ii) provide the Service Recipient with such information regarding the nature and scope of the Security Incident as is then reasonably available; and (iii) cooperate with the Service Recipient in investigating and remediating such Security Incident.

(c) The Service Provider shall provide the Service Recipient with updates regarding the investigation and remediation of any Security Incident at reasonable intervals and shall take commercially reasonable steps to contain, mitigate, and remediate the effects of such Security Incident.

Section 6.4 — Return and Destruction of Data

(a) Upon the termination or expiration of any Transition Service (or upon the termination or expiration of this Agreement in its entirety), the Service Provider shall, at the Service Recipient's election (to be communicated in writing within thirty (30) days of such termination or expiration), either: (i) return to the Service Recipient all Service Recipient data (including Personal Data) in the Service Provider's possession or control in a format reasonably requested by the Service Recipient; or (ii) securely destroy all such Service Recipient data using methods consistent with industry best practices for data destruction and certify in writing to the Service Recipient that such destruction has been completed.

(b) Notwithstanding Section 6.4(a), the Service Provider may retain copies of Service Recipient data to the extent: (i) required by Applicable Law, regulatory requirements, or court order; (ii) retained in accordance with the Service Provider's bona fide document-retention policies applicable to similar data; or (iii) contained in automated backup or archival systems, provided that the Service Provider shall use commercially reasonable efforts to purge such data from backup systems in accordance with its standard data-retention schedule. Any Service Recipient data retained by the Service Provider pursuant to this Section 6.4(b) shall remain subject to the confidentiality and data-protection obligations of this Agreement for so long as such data is retained.

ARTICLE VII — GOVERNANCE

Section 7.1 — Steering Committee

(a) Within five (5) Business Days after the Closing Date (or such other period as the Parties may agree), the Parties shall establish a joint steering committee (the "Steering Committee") to oversee the performance of the Transition Services and the implementation of the Migration Plan. The Steering Committee shall be composed of two (2) representatives designated by the Service Provider and two (2) representatives designated by the Service Recipient. Each Party shall notify the other Party in writing of the identity and title of its Steering Committee designees promptly following their designation.

[Guidance Note: The names and titles of the initial Steering Committee representatives will be inserted at the time of execution, or the Parties may state: "To be designated by each Party within five (5) Business Days after the Closing Date."]

(b) The Steering Committee shall have the following responsibilities:

(i) overseeing the performance of the Transition Services and monitoring compliance with the Service Levels and the terms of this Agreement;

(ii) reviewing and approving requests for Omitted Services pursuant to Section 2.3;

(iii) reviewing and approving requests for extensions of Service Periods pursuant to Section 3.3;

(iv) reviewing and approving material modifications, amendments, or supplements to the Service Schedules;

(v) resolving operational issues, disputes, and disagreements that cannot be resolved by the designated service managers;

(vi) serving as the initial escalation point for disputes under Section 4.4 and Article X;

(vii) reviewing periodic status reports on the provision of the Transition Services and the progress of the Migration Plan; and

(viii) performing such other functions as the Parties may mutually agree from time to time.

(c) Each Party may replace any of its Steering Committee representatives at any time by providing written notice to the other Party. The Steering Committee shall act by unanimous decision of its members; provided that if the Steering Committee is unable to reach unanimous agreement on any matter within the time frame specified in this Agreement, such matter shall be escalated in accordance with the dispute resolution procedures set forth in Article X.

Section 7.2 — Meetings

(a) The Steering Committee shall hold regular meetings at least bi-weekly (or at such other frequency as the Steering Committee may determine) during the term of this Agreement. Meetings may be held in person at a mutually agreeable location, or by telephone or videoconference, as the Steering Committee may determine.

(b) In advance of each regular meeting, the Service Provider shall prepare and distribute to the Steering Committee a periodic status report regarding the provision of the Transition Services and

FORM OF TRANSITION SERVICES AGREEMENT
Exhibit [____] to the Merger Agreement
[This is a form agreement. The final Transition Services Agreement will be executed at or prior to the Closing Date in substantially this form, with the Schedules completed by agreement of the Parties.]
Right-click to update Table of Contents
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement") is made and entered into as of [__, 20] (the "Effective Date"), by and between:
[Insert name of entity providing services], a [__] organized under the laws of [__], with its principal place of business at [____] (the "Service Provider");
and
[Insert name of entity receiving services], a [__] organized under the laws of [__], with its principal place of business at [____] (the "Service Recipient" and, together with the Service Provider, the "Parties" and each, a "Party").
[Guidance Note: The identity of the Service Provider and Service Recipient will be determined based on the final allocation of transitional service responsibilities agreed prior to the Closing Date. The Service Provider may be the Surviving Corporation, one or more of its subsidiaries, or an affiliate of the Buyer, depending on the direction of services. The Service Recipient may be an affiliate of the Buyer or the Surviving Corporation and/or its subsidiaries, depending on the direction of services. Where services flow in both directions, each Party may serve as both Service Provider and Service Recipient, with separate Service Schedules for each direction of service. The Parties and their respective roles will be determined based on the final allocation of transitional service responsibilities agreed prior to the Closing Date.]
RECITALS
WHEREAS, Cloudium Technologies plc, a public limited company organized under the laws of England and Wales ("Buyer"), Stratos Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Buyer ("Merger Sub"), and Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership ("Target"), entered into that certain Agreement and Plan of Merger, dated as of January 22, 2024 (as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms, the "Merger Agreement"), pursuant to which Merger Sub merged with and into Target, with Target surviving as a wholly owned subsidiary of Buyer (the "Merger");
WHEREAS, in connection with and following the consummation of the Merger, the Parties have agreed to enter into this Agreement to facilitate an orderly transition of certain business operations, information technology systems, and administrative and operational support functions, and to ensure continuity of essential services during the transition period following the closing of the Merger;
WHEREAS, this Agreement is being entered into pursuant to and in connection with Section [__] of the Merger Agreement, which contemplates the execution and delivery of a transition services agreement in substantially the form attached as an exhibit thereto; and
WHEREAS, certain of the Transition Services (as defined below) may be provided by or through qualified third-party subcontractors, and the Parties acknowledge and agree that the engagement of such subcontractors shall be subject to the terms and conditions of this Agreement.
[Placeholder for any additional recitals as may be needed based on the final structure of the Transition Services.]
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement. As used in this Agreement, the following terms shall have the meanings set forth below:
"Applicable Law" means, with respect to any Person, all federal, state, provincial, local, municipal, foreign, international, multinational, or other laws (including common law), constitutions, statutes, codes, decrees, rules, regulations, by-laws, ordinances, directives, orders, injunctions, judgments, awards, or decrees of, or agreements with, any Governmental Authority that are binding upon or applicable to such Person or any of its properties, assets, officers, directors, employees, consultants, or agents, in each case as amended from time to time and including all binding judicial and administrative interpretations thereof.
"Business Day" means any day that is not a Saturday, Sunday, or other day on which commercial banks in New York, New York or London, England are authorized or required by Applicable Law to remain closed. This definition is intended to be consistent with the definition of "Business Day" set forth in the Merger Agreement, and to the extent of any conflict between this definition and the definition in the Merger Agreement, the definition in the Merger Agreement shall control.
"Closing Date" means the date on which the closing of the Merger occurs pursuant to and in accordance with the terms of the Merger Agreement.
"Confidential Information" means all proprietary, confidential, business, technical, financial, operational, and other non-public information, whether in written, oral, electronic, visual, or other form, that is disclosed by or on behalf of one Party (or its affiliates) to the other Party (or its affiliates) in connection with the negotiation, execution, or performance of this Agreement, including: (a) trade secrets, know-how, inventions, processes, techniques, algorithms, and software; (b) business plans, strategies, forecasts, projections, and budgets; (c) financial statements, reports, and data; (d) customer and supplier lists, pricing information, and contract terms; (e) employee information and personnel records; (f) information regarding information technology systems, network configurations, security protocols, and data architectures; and (g) any analyses, compilations, studies, notes, or other documents prepared by or on behalf of a Party that contain, reflect, or are derived from any of the foregoing. Confidential Information shall not include information that: (i) is or becomes generally available to the public other than as a result of a disclosure by the receiving Party or its representatives in violation of this Agreement; (ii) was available to the receiving Party on a non-confidential basis prior to its disclosure by the disclosing Party; (iii) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party or its representatives, provided that such source is not, to the receiving Party's knowledge, bound by a confidentiality agreement with, or other contractual, legal, or fiduciary obligation of confidentiality to, the disclosing Party; or (iv) is independently developed by the receiving Party without use of or reference to the disclosing Party's Confidential Information.
"Facilities Services" means the services described on Schedule D attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.
"Finance and Accounting Services" means the services described on Schedule B attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.
"Force Majeure Event" means any event or circumstance beyond the reasonable control of the affected Party, including: acts of God; floods, earthquakes, hurricanes, tornados, and other natural disasters; epidemics, pandemics, or quarantine restrictions; war (whether declared or undeclared), armed conflict, military action, invasion, or insurrection; acts of terrorism, sabotage, or piracy; riots, civil unrest, or civil commotion; strikes, lockouts, or other labor disputes (other than those involving the affected Party's own employees, unless such labor dispute is industry-wide); embargoes, sanctions, or blockades; fire or explosion; power outages or failures of telecommunications or information technology infrastructure not caused by the affected Party; and any action, regulation, order, or decree of any Governmental Authority (including the imposition of export controls, import restrictions, or other governmental restrictions or requirements); provided, however, that (x) the unavailability of funds, general economic conditions, changes in market conditions, or the financial condition of a Party shall not constitute a Force Majeure Event and (y) the failure to obtain any required third-party consent shall not constitute a Force Majeure Event except to the extent such failure results from a Force Majeure Event otherwise described in this definition.
"General and Administrative Services" means the services described on Schedule E attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.
"Historical Standard" has the meaning set forth in Section 2.1.
"Human Resources Services" means the services described on Schedule C attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.
"IT Services" means the services described on Schedule A attached hereto, as such schedule may be amended, supplemented, or modified from time to time in accordance with the terms of this Agreement.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of January 22, 2024, among Cloudium Technologies plc, Stratos Merger Sub Inc., and Solara Digital Infrastructure Fund VI LP, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
"Migration Plan" means the plan developed by the Parties (or to be developed by the Parties) for the transition and migration of each Transition Service from the Service Provider to the Service Recipient or to a replacement provider designated by the Service Recipient, as further described in Section 3.4 and Schedule G.
"Omitted Service" has the meaning set forth in Section 2.3.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, Governmental Authority, or any other entity or body.
"Personal Data" means any information relating to an identified or identifiable natural person, to the extent that such information is protected as "personal data," "personal information," "personally identifiable information," or any analogous term under Applicable Law.
"Service Fees" means the fees payable by the Service Recipient to the Service Provider for the Transition Services, as set forth in the applicable Service Schedule, summarized in Schedule F, and subject to the provisions of Article IV.
"Service Level" means the level, volume, quality, timeliness, and standard of performance of a Transition Service as described in the applicable Service Schedule, subject to the Historical Standard and the other provisions of this Agreement.
"Service Period" means, with respect to each Transition Service, the period during which such Transition Service is to be provided by the Service Provider to the Service Recipient, as specified in the applicable Service Schedule, subject to early termination, extension, or other modification as provided in Article III.
"Service Provider" has the meaning set forth in the preamble to this Agreement.
"Service Provider Personnel" means the employees, officers, agents, independent contractors, subcontractors, consultants, and other personnel of the Service Provider or its affiliates who are engaged in the performance of the Transition Services.
"Service Recipient" has the meaning set forth in the preamble to this Agreement.
"Service Schedules" means Schedules A through E attached hereto (and such additional schedules as may be added by mutual written agreement of the Parties), each of which describes one or more categories of Transition Services to be provided under this Agreement.
"Steering Committee" has the meaning set forth in Section 7.1.
"Transition Services" means the services described in the Service Schedules, together with any Omitted Services added pursuant to Section 2.3 and any other services added by mutual written agreement of the Parties in accordance with this Agreement.
"Wind-Down Costs" has the meaning set forth in Section 3.2.
Section 1.2 — Interpretation
The following rules of interpretation shall apply to this Agreement:
(a) The headings, captions, and titles of the Articles, Sections, and Schedules of this Agreement are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of this Agreement.
(b) Words importing the singular number shall include the plural and vice versa, and words importing any gender shall include all genders.
(c) The words "include," "includes," and "including" shall be deemed to be followed by the words "without limitation."
(d) Unless the context otherwise requires, references to "days" shall mean calendar days. Where this Agreement specifies a period of "Business Days," such period shall be calculated by excluding any day that is not a Business Day.
(e) All references to currency, monetary values, and dollar amounts shall refer to United States dollars unless otherwise expressly stated.
(f) References to any statute, law, regulation, or rule shall be deemed to include all amendments, modifications, supplements, and successor legislation thereto, and all rules and regulations promulgated thereunder, in each case as in effect from time to time.
(g) References to any agreement, instrument, or document shall be deemed to refer to such agreement, instrument, or document as it may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
(h) References to "Sections," "Articles," and "Schedules" shall be references to the Sections, Articles, and Schedules of this Agreement, unless otherwise specified.
(i) The terms "hereof," "herein," "hereby," "hereto," and derivative or similar words refer to this entire Agreement (including all Schedules).
(j) Each Party acknowledges that it has been represented by counsel in connection with this Agreement, and accordingly, any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation or construction of this Agreement.
ARTICLE II — TRANSITION SERVICES
Section 2.1 — Provision of Transition Services
(a) Subject to the terms and conditions of this Agreement, the Service Provider shall provide (or shall cause to be provided) to the Service Recipient the Transition Services described in each Service Schedule during the applicable Service Period. The Service Provider shall perform the Transition Services with reasonable care and in a professional and workmanlike manner, consistent with the nature, quality, standard, timeliness, and level of the corresponding services provided by or to the applicable business in the ordinary course during the twelve (12)-month period immediately prior to the Closing Date (the "Historical Standard"). The Service Provider shall allocate sufficient resources, including qualified personnel and appropriate infrastructure, to meet the Historical Standard.
(b) Notwithstanding anything to the contrary in this Agreement, the Service Provider shall have no obligation to provide any Transition Service at a level that is materially higher or more comprehensive than the Historical Standard, and any request by the Service Recipient for services that materially exceed the Historical Standard shall be subject to mutual written agreement of the Parties, including agreement on any incremental costs associated therewith.
(c) The Transition Services shall be provided on a non-exclusive basis. The Service Provider retains the unrestricted right to provide the same or similar services to its own operations, its affiliates, and any other third parties during the term of this Agreement, provided that the provision of such services to third parties does not materially impair the Service Provider's ability to perform the Transition Services in accordance with the terms of this Agreement.
(d) The geographic scope of the Transition Services shall be as specified in the applicable Service Schedule. Unless otherwise expressly stated in a Service Schedule, the Transition Services are expected to be provided in and for the benefit of operations located in the United States, the United Kingdom, India, and Germany, as applicable to the relevant categories of services described herein. The Parties acknowledge that certain Transition Services may require the provision of support across multiple jurisdictions and time zones, and the Service Provider shall use commercially reasonable efforts to accommodate such cross-jurisdictional requirements in a manner consistent with the Historical Standard.
Section 2.2 — Service Schedules
(a) Each category of Transition Services shall be described in a separate Service Schedule attached to this Agreement. Each Service Schedule shall specify the following information for each Transition Service (or group of related Transition Services) described therein:
(i) a reasonably detailed description of the Transition Service to be provided;
(ii) the name, title, and contact information of the Service Provider's designated service manager or contact person for such Transition Service;
(iii) the name, title, and contact information of the Service Recipient's designated service manager or contact person for such Transition Service;
(iv) the applicable Service Level, including any quantitative performance metrics, service-level agreements, response times, or other measurable standards, to the extent applicable to such Transition Service;
(v) the Service Period for such Transition Service, including the start date (which, unless otherwise specified, shall be the Closing Date) and the scheduled end date;
(vi) the Service Fees or fee methodology applicable to such Transition Service, including whether fees are calculated on a cost-plus, fixed-fee, time-and-materials, or other basis;
(vii) a description of any third-party consents, licenses, sublicenses, or subcontracting arrangements required in connection with the provision of such Transition Service, together with a summary of any actions required to obtain such consents or licenses;
(viii) any specific data-handling, data-privacy, information-security, or regulatory requirements applicable to such Transition Service, including any requirements arising under data-protection laws applicable to the jurisdictions in which the Transition Service is provided or in which data subjects are located; and
(ix) a summary of the migration and wind-down plan timeline for such Transition Service, including key milestones, target migration completion dates, and the allocation of responsibilities between the Parties.
(b) The Service Schedules shall be completed by the Parties, acting in good faith, prior to the Closing Date and shall be attached hereto at the time of execution of this Agreement. To the extent any Service Schedule is not finalized as of the date of execution, the Parties shall use commercially reasonable efforts to complete and attach such Service Schedule within fifteen (15) Business Days following the Closing Date.
Section 2.3 — Omitted Services
(a) If, within ninety (90) days following the Closing Date, the Service Recipient identifies a service that: (i) was provided by or to the applicable business in the ordinary course during the twelve (12)-month period immediately prior to the Closing Date; (ii) is reasonably necessary for the continued operation of the Service Recipient's business; and (iii) was inadvertently omitted from the Service Schedules, the Service Recipient may submit a written request to the Service Provider to add such service as an "Omitted Service" under this Agreement.
(b) Upon receipt of a written request pursuant to Section 2.3(a), the Service Provider shall use commercially reasonable efforts to provide (or cause to be provided) the Omitted Service on terms and conditions (including pricing) that are consistent with the terms and conditions of this Agreement and the pricing methodology set forth in Article IV. The Parties acknowledge that commercially reasonable efforts shall not require the Service Provider to hire additional personnel, acquire additional equipment or software, or enter into new third-party agreements beyond what is commercially reasonable in the circumstances.
(c) The procedure for adding an Omitted Service shall be as follows: (i) the Service Recipient shall deliver a written request to the Service Provider describing the Omitted Service in reasonable detail; (ii) the Parties shall negotiate in good faith the terms and conditions applicable to such Omitted Service, including the Service Level, Service Period, and Service Fees; and (iii) upon agreement of the Parties, the applicable Service Schedule shall be amended (or a new Service Schedule shall be added) to reflect the Omitted Service. The Parties shall use commercially reasonable efforts to complete such negotiation and execute the applicable amendment within fifteen (15) Business Days of the Service Provider's receipt of the initial written request. Any Omitted Service added pursuant to this Section 2.3 shall be deemed a Transition Service for all purposes of this Agreement.
Section 2.4 — Subcontracting
(a) The Service Provider may subcontract the performance of all or any portion of the Transition Services to qualified third-party subcontractors, subject to the following conditions:
(i) The Service Provider shall provide the Service Recipient with reasonable prior written notice of any proposed subcontracting arrangement, including the identity of the proposed subcontractor, a description of the services to be subcontracted, and the qualifications of the proposed subcontractor. With respect to any subcontractor that will have access to or process Confidential Information or Personal Data of the Service Recipient, the Service Provider shall obtain the prior written consent of the Service Recipient before engaging such subcontractor, which consent shall not be unreasonably withheld, conditioned, or delayed.
(ii) Notwithstanding any subcontracting arrangement, the Service Provider shall remain fully responsible for the performance of the subcontracted Transition Services and for any acts or omissions of any subcontractor to the same extent as if the Service Provider had performed such services directly. The engagement of a subcontractor shall not relieve the Service Provider of any of its obligations under this Agreement.
(iii) The Service Provider shall ensure that each subcontractor is bound by written confidentiality obligations that are at least as protective as the confidentiality obligations set forth in Article VI of this Agreement, and by data-protection obligations that are consistent with the requirements of Section 6.2 and Schedule H (to the extent applicable).
(b) The Parties acknowledge that certain Transition Services may currently be provided through third-party vendors pursuant to pre-existing contractual arrangements. With respect to any such third-party vendor arrangement, the Service Provider shall use commercially reasonable efforts to maintain, renew, or extend such arrangement for the duration of the applicable Service Period. If the continued provision of a Transition Service through a third-party vendor requires the consent of such vendor and such consent cannot be obtained after the Service Provider has exercised commercially reasonable efforts to obtain it, the Service Provider's obligation with respect to such Transition Service shall be limited to providing a commercially reasonable alternative that, to the extent practicable, achieves substantially the same result for the Service Recipient.
Section 2.5 — Cooperation
(a) Each Party shall cooperate fully and in good faith with the other Party to facilitate the orderly provision, receipt, and ultimate migration of the Transition Services. Such cooperation shall include, without limitation, the timely exchange of information, data, and documentation reasonably necessary for the performance of the Transition Services, the prompt identification and resolution of operational issues, and the good-faith negotiation of any amendments or modifications to the Service Schedules that may be necessary or appropriate from time to time.
(b) The Service Recipient shall provide the Service Provider with reasonable access to its facilities, systems, personnel, and information as may be necessary for the Service Provider to perform the Transition Services in accordance with this Agreement. The Service Recipient shall designate qualified personnel to interface with the Service Provider's personnel, shall respond promptly to reasonable requests for information and approvals, and shall comply with any reasonable policies, procedures, and guidelines established by the Service Provider in connection with the Transition Services.
(c) The Service Provider shall provide reasonable cooperation with the Service Recipient's efforts to establish independent capabilities and to transition away from the Transition Services. Such cooperation shall include, without limitation, making Service Provider Personnel reasonably available for consultation, knowledge transfer, and training during the applicable Service Period and the wind-down period described in Section 3.4.
ARTICLE III — SERVICE PERIODS AND TERMINATION OF INDIVIDUAL SERVICES
Section 3.1 — Service Periods
(a) Each Transition Service shall be provided for the Service Period specified in the applicable Service Schedule. The Service Period for each Transition Service shall commence on the start date specified in the applicable Service Schedule (which, unless otherwise expressly stated therein, shall be the Closing Date) and shall expire on the end date specified therein, unless earlier terminated in accordance with Section 3.2 or extended in accordance with Section 3.3.
(b) The maximum overall Service Period for any individual Transition Service shall be twelve (12) months from the Closing Date, unless extended pursuant to Section 3.3. In no event shall the aggregate Service Period (including any extensions granted pursuant to Section 3.3) for any individual Transition Service exceed eighteen (18) months from the Closing Date.
[Guidance Note: Individual Service Periods may be shorter than the maximum overall period. The specific end date for each Transition Service will be set forth in the applicable Service Schedule based on the anticipated timeline for migration to the Service Recipient's independent capabilities. The Parties are encouraged to establish Service Periods that are tailored to the complexity and criticality of each Transition Service.]
Section 3.2 — Early Termination of Individual Services
(a) The Service Recipient may terminate any individual Transition Service (in whole or in part) at any time upon not less than thirty (30) days' prior written notice to the Service Provider, specifying the Transition Service (or portion thereof) to be terminated and the effective date of such termination.
(b) Upon the early termination of any Transition Service pursuant to this Section 3.2, the Service Recipient shall pay to the Service Provider: (i) all accrued and unpaid Service Fees with respect to such Transition Service through the effective date of termination; and (ii) any documented, reasonable, non-cancellable third-party costs actually incurred by the Service Provider in connection with the provision of the terminated Transition Service to the extent such costs were incurred prior to the date on which the Service Provider received the termination notice and cannot be avoided, mitigated, or recovered by the Service Provider after the exercise of commercially reasonable efforts (such costs, together, the "Wind-Down Costs"). The Service Provider shall use commercially reasonable efforts to minimize Wind-Down Costs and shall provide the Service Recipient with reasonable documentation supporting any Wind-Down Costs invoiced.
(c) Unless otherwise specified in the applicable Service Schedule, the Service Recipient shall not be entitled to any partial-month credit or refund of Service Fees for any partial month in which a Transition Service is terminated prior to the end of such month. For the avoidance of doubt, any Transition Service that is terminated on a date other than the last day of a calendar month shall be deemed to have been provided for the entire calendar month in which such termination occurs for purposes of calculating the applicable Service Fee, unless the applicable Service Schedule expressly provides otherwise.
Section 3.3 — Extension of Service Periods
(a) The Service Recipient may request an extension of the Service Period for any individual Transition Service for up to two (2) additional periods of three (3) months each (for a maximum total extension of six (6) months) by providing written notice to the Service Provider at least forty-five (45) days before the expiration of the then-current Service Period for such Transition Service. Each such extension request shall identify the Transition Service(s) for which an extension is sought and the requested duration of the extension.
(b) Any extension of a Service Period shall be subject to the mutual written agreement of the Parties, which agreement shall not be unreasonably withheld, conditioned, or delayed by the Service Provider. In considering whether to agree to an extension, the Service Provider may take into account the availability of personnel and resources, the impact of the extension on the Service Provider's own operations and business plans, and any incremental costs or burdens associated with the continued provision of the applicable Transition Service.
(c) Service Fees during any extension period shall be as set forth in Section 4.2 of this Agreement.
(d) In no event shall the aggregate Service Period for any individual Transition Service (including the initial Service Period and all extensions granted pursuant to this Section 3.3) exceed eighteen (18) months from the Closing Date. Any request by the Service Recipient for an extension that would cause the aggregate Service Period for a Transition Service to exceed eighteen (18) months from the Closing Date shall be of no force or effect.
Section 3.4 — Migration and Wind-Down
(a) The Parties shall cooperate in good faith to develop a Migration Plan for each Transition Service, targeting the completion of each migration within the applicable Service Period. The Migration Plan shall identify the key activities, milestones, deliverables, and timelines for transitioning each Transition Service from the Service Provider to the Service Recipient (or to a replacement provider designated by the Service Recipient). The framework for the Migration Plan is set forth on Schedule G, and the detailed Migration Plan for each Transition Service shall be incorporated into the applicable Service Schedule or into a supplemental schedule attached hereto.
(b) During the wind-down period for each Transition Service (which shall commence upon the earlier of (i) sixty (60) days prior to the scheduled end of the applicable Service Period, or (ii) the date on which a notice of early termination is delivered pursuant to Section 3.2), the Service Provider shall provide reasonable transition assistance to the Service Recipient, including:
(i) knowledge transfer relating to the applicable Transition Service, including the provision of documentation, process descriptions, standard operating procedures, and configuration information reasonably necessary for the Service Recipient to assume or replicate the Transition Service independently;
(ii) making Service Provider Personnel who have been primarily responsible for the applicable Transition Service reasonably available for consultation, training, and question-and-answer sessions with the Service Recipient's personnel; and
(iii) cooperating with the Service Recipient and any replacement provider in connection with the testing, validation, and parallel operation of replacement systems and services during the migration period.
[Guidance Note: The Migration Plan framework will be attached as Schedule G or incorporated into each Service Schedule. The Parties should develop the detailed Migration Plan jointly prior to or promptly following the Closing Date.]
ARTICLE IV — SERVICE FEES AND PAYMENT
Section 4.1 — Service Fees
(a) In consideration of the Transition Services provided hereunder, the Service Recipient shall pay to the Service Provider the Service Fees specified in the applicable Service Schedule (and summarized in Schedule F — Fee Schedule) in accordance with the terms and conditions of this Article IV.
(b) Unless otherwise expressly provided in the applicable Service Schedule, Service Fees shall be calculated on a cost-plus basis, reflecting the Service Provider's fully loaded internal cost of providing each Transition Service (including, without limitation, direct labor costs, allocated overhead, and out-of-pocket expenses directly attributable to the performance of such Transition Service), plus a margin of [__]% (the "Margin").
[Guidance Note: The applicable Margin is typically in the range of 0% to 10% and is to be negotiated and agreed upon by the Parties prior to execution. A Margin of 0% (i.e., cost-only) may be appropriate for reverse transition services or where the Merger Agreement requires the provision of services at cost.]
(c) Third-party costs incurred by the Service Provider in connection with the provision of the Transition Services (including, without limitation, fees payable to third-party vendors, software licensing fees, hosting costs, and similar expenses) shall be passed through to the Service Recipient at actual cost, without mark-up, unless otherwise expressly specified in the applicable Service Schedule. The Service Provider shall provide the Service Recipient with reasonable documentation supporting any third-party costs invoiced.
Section 4.2 — Pricing During Extension Periods
During any extension period approved pursuant to Section 3.3, the Service Fees for the extended Transition Service shall increase by [__]% above the applicable Service Fee for the immediately preceding Service Period (the "Extension Step-Up"). For clarity, if a Transition Service is extended for a second extension period, the Service Fee during such second extension period shall be calculated by applying the Extension Step-Up to the Service Fee in effect during the first extension period (i.e., the step-up is cumulative).
[Guidance Note: The Extension Step-Up is typically in the range of 5% to 15% per extension period, and is intended to incentivize the Service Recipient to complete migration within the initial Service Period. The applicable percentage is to be negotiated and agreed upon by the Parties prior to execution.]
Section 4.3 — Invoicing and Payment
(a) The Service Provider shall deliver to the Service Recipient monthly invoices within fifteen (15) days following the end of each calendar month during the term of this Agreement (or such shorter period as may correspond to a partial month at the beginning or end of the term). Each invoice shall be itemized by Transition Service (referencing the applicable Service Schedule and Service ID), shall set forth in reasonable detail the basis for the fees charged (including a description of the services performed, the applicable fee methodology, any third-party costs incurred, and the calculation of the amount due), and shall be accompanied by such supporting documentation as the Service Recipient may reasonably request.
(b) Each properly submitted invoice shall be payable within thirty (30) days of the Service Recipient's receipt thereof. Payments shall be made by wire transfer of immediately available funds to the bank account designated in writing by the Service Provider from time to time.
(c) All payments under this Agreement shall be made in United States dollars. With respect to Transition Services provided outside the United States for which costs are denominated in a currency other than United States dollars, such costs shall be converted to United States dollars using the spot exchange rate published by Westmark Services Inc. (or, if unavailable, such other commercially recognized source as the Parties may agree) as of the last Business Day of the applicable calendar month in which such costs were incurred.
(d) Any amount not paid when due shall bear interest from the date such payment was due until the date of actual payment at a rate equal to the lesser of (i) the prime rate as published in The Wall Street Journal on the date such payment was due, plus two percent (2%) per annum, and (ii) the maximum rate permitted by Applicable Law.
Section 4.4 — Disputed Invoices
(a) If the Service Recipient disputes any portion of an invoice in good faith, the Service Recipient shall: (i) pay the undisputed portion of such invoice when due in accordance with Section 4.3(b); and (ii) deliver written notice to the Service Provider of the disputed items within fifteen (15) days of the Service Recipient's receipt of the applicable invoice, setting forth in reasonable detail the basis for such dispute, the specific line items or amounts disputed, and the Service Recipient's calculation of the amount it believes to be correct.
(b) Upon receipt of a notice of dispute, the Parties shall negotiate in good faith to resolve the disputed amounts within thirty (30) days. During such negotiation period, each Party shall provide the other Party with such information and documentation as may be reasonably requested to facilitate resolution of the dispute.
(c) If the disputed amounts are not resolved within thirty (30) days following the date of the dispute notice, the dispute shall be escalated to the Steering Committee for resolution in accordance with Section 7.1. If the Steering Committee is unable to resolve the dispute within an additional fifteen (15) Business Days, the dispute shall be submitted to the dispute resolution procedures set forth in Article X.
(d) Upon final resolution of any disputed amount, the Party owing such amount shall pay the amount due (together with interest thereon calculated in accordance with Section 4.3(d) from the original due date) within ten (10) Business Days of such resolution.
Section 4.5 — Taxes
(a) All Service Fees stated in this Agreement and in the Service Schedules are exclusive of all applicable sales, use, value-added, goods-and-services, and similar transaction-based taxes, levies, duties, and governmental charges (collectively, "Transaction Taxes"). The Service Recipient shall be responsible for and shall pay all Transaction Taxes imposed on or with respect to the Transition Services provided under this Agreement, unless the Service Recipient provides the Service Provider with a valid tax-exemption certificate or other documentation acceptable to the relevant taxing authority.
(b) Each Party shall be responsible for its own income, franchise, capital, and similar taxes imposed on such Party's net income or capital.
(c) With respect to cross-border Transition Services provided between entities located in the United States, the United Kingdom, India, and Germany (or any other jurisdictions in which Transition Services are provided), the Parties shall cooperate in good faith to determine the appropriate withholding tax treatment, if any, applicable to payments under this Agreement. If any withholding tax is required to be deducted or withheld from any payment under this Agreement, the payor shall: (i) deduct or withhold such tax in the amount required by Applicable Law; (ii) remit the withheld amount to the appropriate Governmental Authority in accordance with Applicable Law; and (iii) provide the payee with a receipt or other evidence of such withholding and remittance within a commercially reasonable time following such remittance. Unless otherwise agreed by the Parties, the payee shall bear the economic burden of any withholding tax, and the payor shall not be required to "gross up" any payment on account of such withholding.
(d) The Parties shall cooperate in good faith to minimize the overall tax burden associated with the Transition Services, including by providing each other with all reasonably requested tax-related documentation, such as IRS Forms W-9, W-8BEN-E, and equivalent foreign forms, certificates of tax residence, and any other documentation necessary to claim applicable exemptions or reduced rates under applicable tax treaties.
Section 4.6 — Set-Off
Neither Party shall have any right to set off, offset, deduct, or withhold any amounts owed under this Agreement against any other amounts owed by the other Party under this Agreement, the Merger Agreement, or any other agreement, without the prior written consent of the other Party; provided, however, that this Section 4.6 shall not limit (a) the right of either Party to set off indemnification obligations under Article IX against amounts owed under this Agreement, to the extent permitted under Article IX, or (b) any set-off agreed to by the Steering Committee in connection with the resolution of a disputed invoice or other dispute under this Agreement.
ARTICLE V — STANDARD OF SERVICES; LIMITATIONS
Section 5.1 — Standard of Care
(a) The Service Provider shall perform the Transition Services with the same degree of care, skill, diligence, and competence as it used to provide (or cause to be provided) the same or substantially similar services during the twelve (12)-month period immediately prior to the Closing Date. The Service Provider shall not be required to perform any Transition Service at a level that materially exceeds the Historical Standard, and the Service Provider's performance shall be measured against the Historical Standard in determining whether the Service Provider has satisfied its obligations under this Agreement.
(b) Except as otherwise expressly provided in a Service Schedule, the Service Provider shall have no obligation to: (i) hire additional employees or personnel; (ii) acquire, lease, license, or maintain additional equipment, software, or other technology; (iii) maintain the employment or services of any specific individual; or (iv) make capital expenditures, in each case in connection with the provision of the Transition Services. Notwithstanding the foregoing, the Service Provider shall use commercially reasonable efforts to maintain adequate staffing levels and resources to perform the Transition Services in accordance with the Historical Standard and the applicable Service Levels.
Section 5.2 — Changes in Services
The Service Provider may make changes to the manner, method, processes, tools, systems, or technology used to provide the Transition Services from time to time, provided that:
(a) such changes are consistent with changes made by the Service Provider to its own operations or to the services it provides to its own affiliates in the ordinary course of business;
(b) such changes do not materially degrade the applicable Service Level or materially adversely affect the quality, timeliness, or reliability of the applicable Transition Service as compared to the Historical Standard; and
(c) the Service Provider provides the Service Recipient with reasonable advance written notice of any material changes, and to the extent practicable, consults with the Service Recipient regarding the timing and implementation of such changes.
In the event that any change implemented by the Service Provider results in a material degradation of a Transition Service, the Service Recipient shall promptly notify the Service Provider, and the Service Provider shall use commercially reasonable efforts to restore the affected Transition Service to a level consistent with the Historical Standard.
Section 5.3 — Exclusion of Warranties
(a) ALL TRANSITION SERVICES ARE PROVIDED "AS IS" AND "AS AVAILABLE." EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT (INCLUDING THE HISTORICAL STANDARD AND ANY EXPRESS SERVICE LEVELS SET FORTH IN THE SERVICE SCHEDULES), NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO THE TRANSITION SERVICES, AND EACH PARTY HEREBY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, ACCURACY, TITLE, AND NON-INFRINGEMENT, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING, USAGE, OR TRADE PRACTICE.
(b) For the avoidance of doubt, the disclaimer set forth in this Section 5.3 shall not limit or modify the Service Provider's obligations under the Historical Standard as set forth in Section 2.1 or any express Service Levels set forth in the applicable Service Schedules.
Section 5.4 — Limitation of Liability
(a) EXCEPT AS PROVIDED IN SECTION 5.4(c), THE AGGREGATE LIABILITY OF THE SERVICE PROVIDER TO THE SERVICE RECIPIENT UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE, SHALL NOT EXCEED [INSERT CAP, E.G., AN AMOUNT EQUAL TO THE AGGREGATE SERVICE FEES PAID OR PAYABLE BY THE SERVICE RECIPIENT TO THE SERVICE PROVIDER DURING THE TWELVE (12) MONTHS PRECEDING THE DATE ON WHICH THE APPLICABLE CLAIM FIRST AROSE].
(b) EXCEPT AS PROVIDED IN SECTION 5.4(c), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR LOST PROFITS, LOST REVENUE, LOSS OF BUSINESS OPPORTUNITY, LOSS OF DATA, DIMINUTION IN VALUE, OR BUSINESS INTERRUPTION, WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR SUCH DAMAGES WERE OTHERWISE FORESEEABLE.
(c) The limitations and exclusions set forth in Sections 5.4(a) and 5.4(b) shall not apply to: (i) losses arising from a Party's fraud or willful misconduct; (ii) losses arising from a Party's breach of its confidentiality obligations under Article VI; or (iii) a Party's indemnification obligations under Article IX with respect to third-party claims.
[Guidance Note: The specific liability cap and the scope of carve-outs from the limitation of liability are to be negotiated and finalized by the Parties prior to execution. The Parties should consider whether additional carve-outs are appropriate, such as for breaches of data-protection obligations or for intellectual property infringement.]
ARTICLE VI — CONFIDENTIALITY AND DATA PROTECTION
Section 6.1 — Confidentiality
(a) Each Party (in its capacity as a receiving party) shall maintain the confidentiality of all Confidential Information received from the other Party (in its capacity as a disclosing party) in connection with this Agreement, and shall not disclose such Confidential Information to any third party without the prior written consent of the disclosing party, except as expressly permitted by this Section 6.1. Each Party shall protect the other Party's Confidential Information with at least the same degree of care that it uses to protect its own confidential information of like nature and importance, but in no event with less than reasonable care.
(b) Each Party may disclose the other Party's Confidential Information: (i) to its directors, officers, employees, agents, consultants, accountants, auditors, legal advisors, lenders, investors, and other representatives (collectively, "Representatives") who have a need to know such information in connection with the performance or receipt of the Transition Services and who are bound by confidentiality obligations at least as protective as those set forth herein; (ii) to its affiliates and their respective Representatives to the same extent and subject to the same conditions; and (iii) to any subcontractor engaged in accordance with Section 2.4 that has a need to know such information in connection with the performance of the subcontracted services and that is bound by confidentiality obligations at least as protective as those set forth herein. Each Party shall be responsible for any breach of this Section 6.1 by its Representatives, affiliates, or subcontractors.
(c) The confidentiality obligations set forth in this Section 6.1 shall not apply to Confidential Information that: (i) is or becomes generally available to the public other than as a result of a disclosure by the receiving party or its Representatives in violation of this Agreement; (ii) was available to the receiving party on a non-confidential basis prior to its disclosure by the disclosing party, as evidenced by the receiving party's contemporaneous written records; (iii) becomes available to the receiving party on a non-confidential basis from a source other than the disclosing party or its Representatives, provided that such source is not, to the receiving party's knowledge, bound by a confidentiality agreement with, or other contractual, legal, or fiduciary obligation of confidentiality to, the disclosing party with respect to such information; or (iv) is independently developed by the receiving party without use of or reference to the disclosing party's Confidential Information, as evidenced by the receiving party's contemporaneous written records.
(d) Notwithstanding the foregoing, either Party may disclose Confidential Information to the extent required by Applicable Law, legal process, regulation, or the rules of any applicable securities exchange; provided that the disclosing party shall, to the extent legally permissible and reasonably practicable, (i) provide the other Party with prompt advance written notice of such required disclosure so as to enable the other Party to seek a protective order, confidential treatment, or other appropriate remedy, and (ii) cooperate with the other Party's reasonable efforts to obtain such protective order or other remedy. If such protective order or other remedy is not obtained, the disclosing party shall disclose only that portion of the Confidential Information that is legally required to be disclosed.
(e) The obligations of confidentiality set forth in this Section 6.1 shall survive the expiration or termination of this Agreement for a period of two (2) years from the date of such expiration or termination.
Section 6.2 — Data Protection and Privacy
(a) Each Party shall comply with all applicable data-protection and privacy laws in connection with the performance and receipt of the Transition Services, including, without limitation:
(i) the UK General Data Protection Regulation (the "UK GDPR") as it forms part of the law of England and Wales, Scotland, and Northern Ireland by virtue of Section 3 of the European Union (Withdrawal) Act 2018, together with the Data Protection Act 2018;
(ii) the EU General Data Protection Regulation (Regulation (EU) 2016/679) (the "EU GDPR"), to the extent applicable to processing activities involving personal data of data subjects located in the European Economic Area;
(iii) applicable U.S. federal and state privacy and data-protection laws, including, without limitation, the California Consumer Privacy Act (as amended by the California Privacy Rights Act), the Health Insurance Portability and Accountability Act (to the extent applicable), and any other state privacy laws applicable to the personal data processed in connection with the Transition Services;
(iv) the Information Technology Act, 2000 (India), the Digital Personal Data Protection Act, 2023 (India), and the rules and regulations promulgated thereunder, to the extent applicable to personal data of data subjects located in India; and
(v) any other data-protection or privacy laws applicable to the processing of personal data in connection with the Transition Services.
(b) To the extent that the Service Provider processes Personal Data on behalf of the Service Recipient in connection with the provision of any Transition Service, the Parties shall execute and attach a Data Processing Addendum in the form of Schedule H, which shall set forth the scope, nature, and purpose of such processing, the categories of data subjects and types of Personal Data processed, the processing instructions, security measures, subprocessor arrangements, breach-notification obligations, audit rights, and other terms required by Applicable Law.
(c) To the extent that the Transition Services involve the transfer of Personal Data across international borders (including transfers from the United Kingdom or the European Economic Area to the United States, India, or any other country that has not been deemed to provide an adequate level of data protection), the Parties shall implement appropriate transfer mechanisms as required by Applicable Law, including, as applicable, the UK International Data Transfer Agreement, the EU Standard Contractual Clauses (Commission Implementing Decision (EU) 2021/914), or such other approved transfer mechanisms as may be required. The Parties shall cooperate in good faith to identify and implement the appropriate transfer mechanisms for each category of cross-border data transfer.
[Guidance Note: Schedule H — Data Processing Addendum will be completed prior to execution based on the specific categories of personal data processed under the Transition Services. The DPA must comply with UK GDPR, EU GDPR (to the extent applicable), and applicable U.S. and Indian data-protection laws.]
Section 6.3 — Information Security
(a) The Service Provider shall implement and maintain administrative, technical, and physical security measures designed to protect the confidentiality, integrity, and availability of the Service Recipient's data (including Personal Data) processed in connection with the Transition Services. Such measures shall be consistent with, and no less protective than, those in effect during the twelve (12)-month period immediately prior to the Closing Date, and shall comply with all applicable information-security requirements set forth in the Service Schedules and Schedule H.
(b) In the event of any actual or reasonably suspected security incident, data breach, or unauthorized access, disclosure, use, loss, destruction, or alteration of the Service Recipient's data (including Personal Data) in the Service Provider's possession or control (a "Security Incident"), the Service Provider shall: (i) notify the Service Recipient in writing as promptly as reasonably practicable, and in any event within seventy-two (72) hours of becoming aware of such Security Incident; (ii) provide the Service Recipient with such information regarding the nature and scope of the Security Incident as is then reasonably available; and (iii) cooperate with the Service Recipient in investigating and remediating such Security Incident.
(c) The Service Provider shall provide the Service Recipient with updates regarding the investigation and remediation of any Security Incident at reasonable intervals and shall take commercially reasonable steps to contain, mitigate, and remediate the effects of such Security Incident.
Section 6.4 — Return and Destruction of Data
(a) Upon the termination or expiration of any Transition Service (or upon the termination or expiration of this Agreement in its entirety), the Service Provider shall, at the Service Recipient's election (to be communicated in writing within thirty (30) days of such termination or expiration), either: (i) return to the Service Recipient all Service Recipient data (including Personal Data) in the Service Provider's possession or control in a format reasonably requested by the Service Recipient; or (ii) securely destroy all such Service Recipient data using methods consistent with industry best practices for data destruction and certify in writing to the Service Recipient that such destruction has been completed.
(b) Notwithstanding Section 6.4(a), the Service Provider may retain copies of Service Recipient data to the extent: (i) required by Applicable Law, regulatory requirements, or court order; (ii) retained in accordance with the Service Provider's bona fide document-retention policies applicable to similar data; or (iii) contained in automated backup or archival systems, provided that the Service Provider shall use commercially reasonable efforts to purge such data from backup systems in accordance with its standard data-retention schedule. Any Service Recipient data retained by the Service Provider pursuant to this Section 6.4(b) shall remain subject to the confidentiality and data-protection obligations of this Agreement for so long as such data is retained.
ARTICLE VII — GOVERNANCE
Section 7.1 — Steering Committee
(a) Within five (5) Business Days after the Closing Date (or such other period as the Parties may agree), the Parties shall establish a joint steering committee (the "Steering Committee") to oversee the performance of the Transition Services and the implementation of the Migration Plan. The Steering Committee shall be composed of two (2) representatives designated by the Service Provider and two (2) representatives designated by the Service Recipient. Each Party shall notify the other Party in writing of the identity and title of its Steering Committee designees promptly following their designation.
[Guidance Note: The names and titles of the initial Steering Committee representatives will be inserted at the time of execution, or the Parties may state: "To be designated by each Party within five (5) Business Days after the Closing Date."]
(b) The Steering Committee shall have the following responsibilities:
(i) overseeing the performance of the Transition Services and monitoring compliance with the Service Levels and the terms of this Agreement;
(ii) reviewing and approving requests for Omitted Services pursuant to Section 2.3;
(iii) reviewing and approving requests for extensions of Service Periods pursuant to Section 3.3;
(iv) reviewing and approving material modifications, amendments, or supplements to the Service Schedules;
(v) resolving operational issues, disputes, and disagreements that cannot be resolved by the designated service managers;
(vi) serving as the initial escalation point for disputes under Section 4.4 and Article X;
(vii) reviewing periodic status reports on the provision of the Transition Services and the progress of the Migration Plan; and
(viii) performing such other functions as the Parties may mutually agree from time to time.
(c) Each Party may replace any of its Steering Committee representatives at any time by providing written notice to the other Party. The Steering Committee shall act by unanimous decision of its members; provided that if the Steering Committee is unable to reach unanimous agreement on any matter within the time frame specified in this Agreement, such matter shall be escalated in accordance with the dispute resolution procedures set forth in Article X.
Section 7.2 — Meetings
(a) The Steering Committee shall hold regular meetings at least bi-weekly (or at such other frequency as the Steering Committee may determine) during the term of this Agreement. Meetings may be held in person at a mutually agreeable location, or by telephone or videoconference, as the Steering Committee may determine.
(b) In advance of each regular meeting, the Service Provider shall prepare and distribute to the Steering Committee a periodic status report regarding the provision of the Transition Services and

FORM OF TRANSITION SERVICES AGREEMENT

TRANSITION SERVICES AGREEMENT

RECITALS

Record

Parties

Dates

Amounts